Singapore aims to support parametric growth amid rising interest across Asia

Singapore’s government and financial regulator have signalled their support to grow the city-state’s role as a hub for parametric solutions, in the latest indicator of the rising role alternative risk transfer instruments are playing in the region.

Gan Kim Yong, who serves as Singapore’s deputy prime minister as well as chairman of the Monetary Authority of Singapore (MAS) and minister for trade and industry, highlighted the role parametrics can play in addressing specific coverage needs not supported by traditional insurance as he opened this year’s Singapore International Reinsurance Conference.

He revealed Singapore was examining ways it could grow as a parametric hub.

“MAS is studying ways to support the growth of parametric insurance, including through research on the regulatory treatment of such solutions in the region as well as information on independent and reliable data resources,” he told delegates.

He also reiterated the regulator’s commitment to grow capacity through sovereign risk solutions, noting Singapore’s participation in the Southeast Asia Disaster Risk Insurance Facility, which has made $4.5mn of flood payouts to Lao PDR in 2023 and 2024.

Gan said Singapore was also supporting the development of ILS markets in Asia to unlock additional risk financing capacity for peak catastrophe risks.

“Of the 28 catastrophe bond issuances in Singapore over the past five years, 13 issuances have covered perils in Asia, providing $1.6bn in coverage,” Gan said.

“We will continue to expand insurance capacity through alternative risk transfer instruments.”